South African Equities – What lies beneath
In this live-recorded webinar STANLIB’s Head of Absolute Returns, Marius Oberholzer, and Senior Portfolio Manager, Warren Buhai, shared their SA equity thesis, while considering the market shifts in 2020 and within the construct of the recent equity market bounce.
Marius Oberholzer
Head of Absolute Return Franchise
BCom(Economics and Commercial Law), MSc(Global Finance)
Marius joined STANLIB in September 2013 and has been Head of Stanlib Absolute Return Strategies since September of 2015. He has over 20 years’ industry experience, gained locally and in London and Hong Kong.
Warren Buhai
Senior Portfolio Manager
BCompt(Hons), CA(SA), CFA
Warren has been with STANLIB since 2009, and has over 20 years industry experience. He has been part of the Absolute Returns team as a senior portfolio manager since the second half of 2019.
Key takeouts
- Equity markets have struggled to deliver returns since the Global Financial Crisis, other than in the US. From a global investors’ perspective investing in the SA market, we are back to where we were 15 years ago. Why is the US doing so well? It comes down to six tech stocks.
- SA’s currency performance has a significant impact on equity market performance, similar to other emerging markets. In South Africa, the depreciating rand has supported equity market growth for the last nine years and provided multi-national exposure.
- Commodity performance is another equity market performance driver, which is benefitting the SA resource sector. This may differ for precious metals, which typically perform when investors are looking to protect wealth.
- SA company shares, also referred to as SA Inc, are showing weak earnings growth. South Africa is faced with structural problems as well as fiscal problems which hamper growth. This in turn has an impact on cost of capital which impacts valuations.